Royal Mail faces new OFCOM fine over missed delivery targets

OFCOM, Britain’s communications regulator, has launched a new investigation into Royal Mail ‘failure to meet its delivery targets’.

It comes as the UK government – which with an election six weeks away, is now influx – is to scrutinise takeover interest from a foreign bidder, Czech billionaire Daniel Křetínský, who’s bid values Royal Mail parent company International Distribution Services (IDS) at £3.5 billion.

Royal Mail has admitted to OFCOM that it had not achieved its mandated delivery targets.

These delivery mandates form part of the public service obligations that the privatised national mail company has been seeking to renegotiate, and will likely be a consideration in the government’s review of the company’s sale.

What are the targets?

According to OFCOM rules, Royal Mail is required to deliver 93% of all first-class mail within one working day from collection, and it must deliver 98.5% of second-class mail within three working days.

Instead, Royal Mail confirmed to OFCOM that during its 2023/24 operating period it had delivered only 74.5% of first-class mail within the allowed time, and had delivered 92.4% of second-class mail within the time limit.

OFCOM said it will consider if any exceptional events beyond the company’s control may have explained why it missed its targets.

The regulator can choose to impose a financial penalty and, indeed, last year it fined Royal Mail £5.6 million for failing to meet 2022/23 obligations.